Postal rates are changing. Last year, First-Class rates went from 39. to 41. and will go up again to 42. in May. The cost for other types of business mail is also increasing, including rates on non-standard pieces like 9" x 12" envelopes, international mail and even the discounted rates for pre-sorted automated mailings. Although these increases are measured in pennies or less per item, for business mailers who regularly mail to thousands or even tens of thousands of customers, these pennies can add up fast. So what can mailers do to reduce costs?

For decades, the USPS has been investing in more automation to process the mail faster with improved accuracy. While these are important benefits, in order to take advantage of automation, mailpieces have to become more standardized so that addresses and barcodes are placed on the envelope or wrapper where the machines can read it as well as in a recognizable format for the machines to read. But if most standard-sized and properly addressed mailpieces can be sorted and directed more quickly by machines, then the odd-sized items, and those with questionable addresses, become the exception. They are sidetracked because they require special handling, which takes extra time and labor.

The USPS has noted that undeliverable as addressed (UAA) mail must be forwarded, returned to the sender or treated as waste because addresses are incomplete, incorrect or out-of-date. These are all forms of special handling. The cost for processing UAA mail is more than $1 billion per year. To combat these costs, the USPS has been focusing on reducing UAA mail to cut this amount in half by 2012.

Perfecting the System

Since 2004, the USPS has taken a step-by-step approach to improving its internal systems, as well as setting tighter compliance standards for discounted automation postal rates. They are using incentives to implement the new policies, which includes the lowest possible rate for volume mailings, along with tougher requirements to qualify for those rates. Automated mail that is returned as "undeliverable" can be charged to the mailer at First-Class rates, either per item, or in some cases, for the whole mailing. Mailers who repeatedly fail to comply with the current standards can be fined which ultimately increases overall operating costs.

But the USPS also works hard to help mailers meet automated requirements by offering software tools to check, and often even correct, mailing lists before the labels are printed. On its own and working with other vendors, the USPS provides a variety of data and software programs that help mailers keep their lists up-to-date by drawing upon resources that include frequently updated municipal 911/Emergency address information as well as information that mail carriers can provide through familiarity with their delivery routes. Mail that is thoroughly "scrubbed" of outdated and undeliverable addresses reaches the intended recipient quickly and at the lowest possible rates.

Keeping Lists Clean

The USPS and other vendor address change solutions currently offer technology advancements that tackle the UAA challenge. They recognize the need to provide a variety of approved address update processing tools that can manage your address list and keep it clean. Because most of these tools are fee-based, many large business mailers from publishers to utility companies choose to outsource their print and mail processes to companies that specialize in creating and preparing mail to take advantage of these tools and control costs. Outsourcers can spread the cost of this technology over their customer base, so no one mailer has to carry the burden alone.

Let's take a look at some USPS-approved solutions:

• National Change of Address (NCOALink) You can update lists with change of address information before you mail. The NCOALink service searches lists for individuals, families and businesses that have moved and filed a change of address with the USPS in the last 18 to 48 months. NCOALink reduces the amount of mail that is undeliverable, returned or delayed and speeds mail delivery by directing it to the right address. It also saves money by reducing costs for printing, mail processing, postage and address correction changes. Additionally, it helps meet USPS requirements for First-Class documents and assures that letters reach the right audience. With NCOALink, addresses will be standardized with ZIP+4, carrier route and delivery point barcode.
• Address Not Known (ANKLink) Attempted Not Known and Forwarding Order Expired mail accounts for 30% of UAA mail. An optional enhancement to NCOALink , ANKLink lets mailers detect whether there was a "probable move," allowing mailers to make more informed decisions. If data indicates a target has moved, the mailer may choose to remove the person from the list or process flagged records through NCOALink to get the correct address. By helping reduce the production of UAA mail, ANKLink helps lower costs for preparation and postage.

Additionally, there are many other tools mailers can use to help enhance the quality of your address lists. These include:

• Coding Accuracy Support System (CASS) To ensure confidence in your mailing list data, the USPS offers the CASS system, which measures the accuracy of commercially available address-matching software packages. Anyone using CASS can improve the accuracy of their address-matching software programs in three areas: (1) ZIP+4 delivery point coding, (2) carrier route coding and (3) five-digit coding.
• Address Element Correction (AEC) and AEC II When CASS address-matching software cannot match an address to the ZIP+4 product, the address becomes a candidate for AEC, a service that corrects and standardizes address features, including misspellings, non-standard abbreviations, incorrectly joined and improperly ordered elements, address lines containing data other than the actual address and other missing components. With accurate address lists, AEC allows mailers to take full advantage of automation discounts.
• Delivery Force Knowledge Taking AEC to the next level, the Address Element Correction II (AEC II) system uses Delivery Force Knowledge software to correct address errors that can't be fixed with existing programs. Delivery Force Knowledge uses information about bad addresses submitted by local delivery unit employees.
• Delivery Point Validation (DPV) According to the USPS, there are 145 million confirmed mail delivery points in the United States today. Delivery Point Validation (DPV) takes the CASS system one step further by comparing your mailing list to the USPS's own list of known addresses and verifying whether or not a CASS-certified ZIP+4 address is one of these confirmed delivery points. It's a great service for identifying non-existent delivery points for example, when a single building occupies a whole city block but has only one valid address, or when 102 Main Street is only the parking lot for 100 Main Street. While DPV can't correct an invalid address, by identifying these addresses, you can eliminate them. Reducing the amount of UAA pieces also saves the waste that results from sending printed materials to non-existent addresses. Prior to August 2007, DPV was only a helpful option. Now, however, it's become a mandatory function of CASS-certified software programs, and mailpieces that do not match up to valid addresses stand to lose automated discount rates.

More Benefits

Beyond providing the technologies mentioned above, the USPS is also committed to ensuring that mail can be tracked as it goes through the system. Termed "Digital Intelligent Mail or I-Mail," the goal here is that each mailpiece is uniquely marked to identify critical elements, such as the sender, recipient, postal product used, payment received and other identifiers. The USPS also offers a way for mailers to track the mail through the system with Confirm a solution that provides real-time tracking information about First-Class mail. Coupled with advanced barcoding, it is possible to encode data directly on the envelope and provide machine-readable information on each mailpiece. As soon as the mail hits the mail stream, it is scanned for the information it contains and tracked through the system to the point of delivery. Advance knowledge of the status of each piece, especially if the check is in the mail, business mailers can coordinate phone calls or TV and radio ads to coincide with promotional mailings.

By understanding these address update techniques and mail tracking services, you will know what solutions to employ to make your mailing programs for marketing, invoicing, collections more productive and reduce your total operating costs. When looking for automated solutions to update and correct addresses whether you do it in-house or partner with a professional mail service provider make sure you utilize the latest address pre-processing and "super scrubbing" technologies for the best results. What you want is the benefit of lower rates and quick and accurate delivery, without the hassle of delays and possible penalties.

Harry Stephens is President/CEO and founder of DATAMATX. For more information, visit www.datamatx.com.